Global financial meltdown
Apparel exporters seek cash incentives
The country’s apparel exporters have voiced concern over the slowdown of export orders on deepening global economic downturn and sought immediate government steps to stave off its adverse impact on the local export-oriented industries.
“The government should introduce financial incentives for the export-oriented industries and immediately discuss with the export earning sectors to formulate ways to make local exports competitive in the wake of financial crisis,” they said adding that the government can re-introduce export performance benefits or some kind of bailout packages.
Country’s export earnings in October of 2008 declined by 8.0 per cent compared to the same month of the previous fiscal year.
Bangladesh Garment Manu-facturers and Exporters Associa-tion (BGMEA) President said that manufacturers now want at least re-introduction of export performance benefit which existed during the 80’s.
Exporters said China, a major RMG exporting country, recently withdrew 17 per cent value added tax and slashed its interest rates for the sector. “China has again become competitive in the international market worse hit by the financial meltdown. India, Vietnam and Pakistan also slashed different taxes imposed on raw materials and export of goods amid global recession,” the BGMEA President mentioned.
President of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), a group of over 1300 knit factories, Fazlul Hoque said the government should urgently introduce some sort of package as the prices of knit products are declining fast amid global crisis.
“We want to hold a meeting with the newly formed government and arrive at a formula for the export oriented industries to sustain,” he added.
Fazlul Hoque said, “During the caretaker government we submitted a suggestion to raise cash incentive to 10 per cent from the existing 5.0 per cent to make local products competitive in the international market.”
The government in its budget for the current fiscal has kept aside Tk 10.40 billion for providing cash subsidies to the country’s export oriented industries.
Country’s garment sector contributed around 72 per cent to the export earnings of over $14 billion export in 2007-08 fiscal. It shipped over $10 billion worth of goods in 2007-08 fiscal. The export target for woven has been set at $5.6 billion and $6.5 billion for knit sub sector for the current fiscal year.